Section 80C and All Major Deductions: The Complete Guide

The new tax regime offers lower slab rates but strips out most deductions. The old regime keeps higher slab rates but gives you a wide menu of legitimate deductions to reduce your taxable income. If your total deductions exceed roughly ₹3–4 lakh, the old regime often saves more tax.

Here's the complete playbook of deductions available in the old regime.

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Section 80C: The ₹1.5 Lakh Limit

Section 80C allows a deduction of up to ₹1,50,000 per year. The full menu of eligible investments and expenses:

Insurance and Retirement

• Life insurance premium (for yourself, spouse, any child — whether dependent or not)
• ULIP (Unit Linked Insurance Plan) premium
• Contribution to Employee Provident Fund (EPF)
• Public Provident Fund (PPF) — maximum ₹1.5L/year
• Sukanya Samriddhi Account for your daughter
• Superannuation fund contribution
• National Pension System (NPS) — employee's own contribution under 80CCD(1)

Fixed Income Investments

• NSC (National Savings Certificate) — 5-year tenure
• Senior Citizens Savings Scheme (SCSS) deposit
• 5-year bank term deposit (notified schemes)
• Post Office 5-year Time Deposit
• Infrastructure bonds of public companies (power/infrastructure sector)
• NABARD bonds

Housing

• Principal repayment on home loan (for purchase or construction of residential property)
• Stamp duty and registration charges for property purchase (in the year of payment)
• Contribution to housing board/co-operative society for plot development

Children's Education

• Tuition fees for full-time education of up to 2 children (not development fees or donations)

ELSS Mutual Funds

• Equity Linked Savings Scheme — 3-year lock-in, market-linked returns

Key rule: Deduction under 80C is 100% of investment or ₹1,50,000, whichever is less. The total across all 80C instruments combined is capped at ₹1.5L.

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Section 80CCC: Pension Fund Contributions

Separate from 80C but shares the ₹1.5 lakh combined ceiling with 80C.

Deduction for contributions to annuity plans (pension policies) of LIC or any other insurer — provided the plan is specifically for paying pension. Maximum: ₹1,50,000.

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Section 80CCD: NPS Deductions

NPS has three separate deduction provisions:

80CCD(1): Employee's own NPS contribution

• Deductible up to 10% of salary (for employees) or 20% of Gross Total Income (for self-employed)
• Counts within the ₹1.5L combined ceiling of 80C + 80CCC + 80CCD(1) [this is the 80CCE limit]

80CCD(1B): Additional NPS contribution

• Extra deduction of up to ₹50,000 per year, over and above the ₹1.5L ceiling
• This is exclusive to NPS — no other investment qualifies here
• A salaried person in a high tax bracket can save an additional ₹15,000+ per year in tax just from this section

80CCD(2): Employer's NPS contribution

• Employer contribution to NPS is deductible up to 14% of salary
• Does not count toward the ₹1.5L ceiling
• The employer's contribution is first included in the employee's salary income, then deducted — net effect is it's tax-free

Bottom line on NPS: The total tax benefit from NPS across 80CCD(1), (1B), and (2) can be substantial — one of the most powerful tax-saving tools currently available.

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80CCE: The Combined ₹1.5L Cap

Section 80CCE is just the rule that says: the total of 80C + 80CCC + 80CCD(1) cannot exceed ₹1,50,000. This is the ceiling everyone talks about.

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Section 80D: Health Insurance Premiums

Deduction for health insurance premiums — available to individuals and HUFs.

Payment must be made by non-cash modes (cheques, UPI, etc.) — except preventive health check-ups, which can be paid in cash.

Deduction limits:

Maximum possible under 80D: If both you and your parents are senior citizens — ₹50,000 + ₹50,000 = ₹1,00,000 per year.

Preventive health check-up: Included within the above limits — up to ₹5,000 per year (but doesn't increase the overall limit).

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Section 80DD: Dependent with Disability

If you have a dependent family member with a disability:

• Disability (40%+ impairment): ₹75,000 flat deduction
• Severe disability (80%+ impairment): ₹1,25,000 flat deduction

This is a flat deduction regardless of actual expenses — you get it simply for having the medical certificate and being the primary caregiver. "Dependent" includes spouse, children, parents, and siblings.

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Section 80DDB: Medical Treatment of Specified Diseases

For treatment of specified diseases (cancer, chronic kidney failure, AIDS, neurological diseases, etc.) for yourself or dependents:

• General: ₹40,000 deduction
• Senior citizens: ₹1,00,000 deduction

Deduction is reduced by any amount reimbursed by insurance or employer.

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Section 80U: Self with Disability

If you (the taxpayer) have a disability certified by a specialist:

• Disability (40%+): ₹75,000
• Severe disability (80%+): ₹1,25,000

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Section 80G: Donations

Donations to approved funds and institutions — the amount of deduction (100% or 50%) and whether there's a qualifying limit depends on who you donate to.

100% deduction, no qualifying limit (examples):

• Prime Minister's National Relief Fund
• PM CARES Fund
• National Defense Fund
• National Children's Fund
• Clean Ganga Fund
• Swachh Bharat Kosh

50% deduction, no qualifying limit:

• Prime Minister's Drought Relief Fund

100% deduction, subject to 10% of Adjusted GTI:

• Donations to government for family planning promotion
• Donations to Indian Olympic Association for sports infrastructure development

50% deduction, subject to 10% of Adjusted GTI:

• Donations to government for charitable purposes (not family planning)
• Donations for renovation of notified religious places
• Donations to minority welfare corporations

Key rules:

• Cash donations above ₹2,000 are NOT eligible. Must use digital payment modes.
• You need a receipt or Form 10BE (for AY 2022-23 onwards) from the recipient institution.
• Donations "in kind" (food, clothes, items) don't qualify — only cash or bank transfers.

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Section 80GG: Rent Deduction for Non-HRA Recipients

If you don't receive HRA but pay rent (self-employed, or salaried without HRA component):

The least of the following is deductible:

• ₹5,000 per month (₹60,000 per year)
• Rent paid minus 10% of Total Income
• 25% of Total Income

Conditions: You must not own any residential property in your name anywhere (including your spouse's name). File Form 10BA as declaration.

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Section 80TTA and 80TTB: Interest on Savings Accounts

80TTA (non-senior citizens): Deduction up to ₹10,000 on interest from savings bank accounts (not FDs).

80TTB (senior citizens only): Deduction up to ₹1,00,000 on interest from savings accounts AND fixed deposits, recurring deposits, etc. — much more comprehensive and generous.

Note: 80TTA and 80TTB cannot both be claimed. Senior citizens use 80TTB.

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Section 87A: Rebate (Not a Deduction, but Essential)

Section 87A is a rebate — a direct reduction from tax payable (not from income).

Old tax regime: Full tax rebate (up to ₹12,500) if total income doesn't exceed ₹5,00,000.

New tax regime (Budget 2025): Full tax rebate if total income doesn't exceed ₹7,00,000 to ₹12,00,000 (check current year rules — this has been revised and proposed for further revision). Effectively makes people with income up to ₹12 lakh pay zero tax under the new regime.

The rebate is applied after computing tax but before adding cess.

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Home Loan Deductions Beyond Section 80C

Section 24(b): Interest on home loan — deductible up to ₹2,00,000 per year for self-occupied property (no ceiling for let-out property, but set-off against other income capped at ₹2L/year).

Section 80EE (loan sanctioned in FY 2016-17): Additional ₹50,000 interest deduction — first-time buyer, loan up to ₹35L, property value up to ₹50L.

Section 80EEA (loan sanctioned Apr 2019–Mar 2021): Additional ₹1,50,000 interest deduction for affordable housing — property stamp duty value up to ₹45L, first-time buyer, not eligible for 80EE.

These are over and above the Section 24(b) limit — so a qualifying first-time buyer could claim ₹2L + ₹1.5L = ₹3.5L in interest deductions annually.

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Stacking It Up: Maximum Possible Deduction

For a salaried individual in the old regime with optimal planning:

That's ₹6+ lakh in deductions before employer NPS, easily justifying staying in the old regime for anyone in the 30% bracket with a home loan and aging parents.

If your deductions are under ₹2–3 lakh, the new regime's lower rates likely save more. Model both.